31st Oct 2007 07:01
Thor Mining PLC31 October 2007 THOR MINING PLC Quarterly Report - September 2007 Dated: 31st October 2007 MOLYHIL TUNGSTEN-MOLYBDENUM PROJECT ("Molyhil") Development Highlights • Updated resource completed with 55% increase in overall tonnage to 3.73 million tonnes; • New Mining reserve completed with 98% increase in overall tonnage to 2.15 million tonnes; • Proposed processing rate increased to 400,000 tonnes per annum, life of mine to extend to over 5 years; • Engineering review completed indicating a 400,000tpa operation can be developed for AUS$63.3M, including additional owner operator costs, this has resulted in substantially lower annual operating costs; • Landmark Native Title Mining Agreement signed with Eastern Arrernte indigenous people. Agreement clears the way for granting of Molyhil Mining Leases; • No objections received during the Public Environment Review period, the Mining Management Plan is prepared and will be submitted shortly; • Thor has advanced negotiations for an off-take agreement with interested parties. We anticipate an agreement in principal will be reached during the December quarter; and • Financing alternatives are now being considered with the assistance of several parties. Exploration Highlights • Further exploration targets identified from recently completed IP geophysical survey. Molyhil deposit itself remains open at depth with potential to increase resources with deeper drilling; and • New targets have been defined and it is planned that drilling of these would commence in 2008. URANIUM PROJECTS • Reconnaissance air core drilling completed at Plenty Highway Project with assay results expected in mid-to-late November 2007; • Encouraging rock chip results received from ground surveys at the Harts Range Project including elevated uranium values; and • Follow up work at Harts Range now underway. MOLYHIL TUNGSTEN - MOLYBDENUM PROJECT MOLYHIL DEVELOPMENT Updated Resource Thor's consultants completed the resource update during the quarter; it resultedin a 55% increase in overall tonnage to 3.73 million tonnes at 0.51% combinedtungsten (WO3) and molybdenum (MoS2). The revised resource now comprises: • Measured Resource of 530,000 tonnes at 0.42% WO3 and 0.27% MoS2, a 43% tonnage increase over the previous resource; • Indicated Resource of 2.4 million tonnes at 0.39% WO3 and 0.17% MoS2, a 37% increase over the previous resource; and • Inferred Resource of 800,000 tonnes at 0.15% WO3 and 0.1% MoS2, more than three times higher than the previous resource. The significant increase in the overall resource tonnage is a direct result ofthe two recent drilling campaigns, which have improved the geological model andincreased confidence in the continuity of the mineralisation. Mining Reserve The new Proven and Probable reserve is based on only the Measured and Indicatedcategories of the revised resource. Approximately 73% of these Measured andIndicated resource tonnages converted to reserve status, which now totals: Tonnes Grade WO3 Grade MoS2Proven 456,000 0.47% 0.30%Probable 1,690,000 0.49% 0.20 %Total 2.15 million tonnes 0.49% 0.22% This represents a tonnage increase of 98%. Open pit designs have now been completed in two stages. The initial pit has beendesigned for the first 3.7 years of operation to maximise cash flow with thesubsequent pit design continuing for a further 1.9 years at current commodityprices. The mining reserve contains a total of 4.8 million pounds of molybdenum metaland 700,000 mtu's of tungsten which will be produced over the expected 5.6 yearlife of the open pit design. Engineering Review Perth-based consulting engineering group, GR Engineering Pty Ltd ("GRE"), hascompleted a review of the capital cost estimate for Molyhil. This included thepreviously announced proposed upgrade in the processing capacity of the plant to400,000 tonnes per annum. The estimated total capital cost for the Molyhil process plant, including anallowance for contingency, EPCM and owner operator costs is AUS$63.3 million.This includes a provision of AUS$13.7 million for owner operator plant andequipment, previously this plant and equipment was included in operating costsas lease or hire costs. This additional capital reduces forecast processing and mining operating costsfrom AUS$94 per tonne to AUS$78 per tonne, a significant saving over theprojected 5.6 year mine life. Off-take Negotiations During the last two quarters, Thor has focused on a strategy of securing anoff-take agreement for Molyhil. A short list of parties has been waiting for thefinal reserve estimate in order to finalise negotiations. This is now underwaywith meeting being held in Perth and Melbourne in the last two weeks. Thorexpects to be able complete off-take negotiations during the December quarter. Financing Now that the final reserve has been determined the company is moving forward tofinance the capital expenditure to develop Molyhil. Financing alternatives arenow being considered with several parties. Native Title Thor has signed a landmark Native Title Mining Agreement this will enable theMolyhil mining leases to be granted. The Agreement was signed withrepresentatives of the community of the Eastern Arrernte people of the CentralNorthern Territory, one of the largest Indigenous groups in Northern Australia. The signing follows the completion of an Indigenous Land Use Agreement in 2002for exploration in the area. Traditional Owners and the Central Land Council metwith Thor representatives on site in March 2007 to finalise mine infra structureapproval. The signing ceremony, which was held at Molyhil site north-east of AliceSprings, was attended by community members as well as the Chairman of theCentral Land Council ("CLC"), Mr Lindsay Bookie, and the Chairman and CEO ofThor Mining, Mr John W Barr and Mr John Young, together with several seniorcompany executives. Environmental and Notice of Intent ("NOI") Keith Lindbeck and Associates ("KLA") have completed a draft of the MiningManagement Plan ("MMP") as recommended by the Public Environmental Review ("PER") document. MOLYHIL EXPLORATION An extensive Induced Polarisation Geophysical Survey ("IP") was recentlycompleted at Molyhil. This survey has successfully identified the Molyhil skarnmineralisation, confirming that IP is an effective exploration tool fortargeting similar skarns in and around the Molyhil deposit. The completion of this IP survey represents the first stage in increasing theregional exploration effort at Molyhil to target additional deposits. Chargeable responses have been identified south, along strike beyond currentdrilling and 500m to the west of the Molyhil mineralisation. A single traversecompleted 150m north of the existing pit identified a chargeable response 50mbelow natural surface where there is no outcropping skarn identified in thisarea and is clearly a priority target. The Molyhil deposit itself remains open at depth with potential to increaseresources with deeper drilling. A plan to drill these deeper targets will befinalised once results from the underground conceptual study are completed.Drilling of these and regional targets will commence in 2008. URANIUM EXPLORATION Hale River Uranium Project Results from air core drilling at the Hale River Uranium Project in the NorthernTerritory were received during the quarter, with a total of 28 holes completedfor 1,829 metres of drilling. Geological logging of the drill holes hasconfirmed the presence of downward coarsening sandy sequences and carbonaceoushorizons within the targeted channels. Results from the upper carbonaceoushorizon have returned values up to 100ppm U confirming the presence of weakredox style mineralisation. Existing anomalies need further drill testing andwork to date has confirmed the presence of suitable "trap sites" for roll frontstyle Uranium mineralization. Plenty Highway Project A program of reconnaissance air core drilling was completed at the PlentyHighway Uranium Project in the Northern Territory A total of 16 air core holes(07PHAC001-016) were drilled for 1,582 m. Drilling completed wide spacedreconnaissance air core holes on two north-south lines and one east-westtraverse along a fence line track. A number of the holes did not reach bedrock due to the intersection of deep clayhorizons which exceeded the capabilities of the drill rig. At this stage, theCompany has not sourced another rig to complete more drilling. The HoistEM data appears to have correctly defined the extent and approximatedepth of the palaeo-channels in the area. Drilling has identified a thin sandylayer covering up to 10m of calcrete while below this thick horizons ofcalcareous clay have been identified with thin units of gypsum and calcretebeing common. Anomalous scintillometer readings have been restricted to units ofquartz sand below the clays. The most prospective area to date appears to be between holes 07PHAC010 and 012,along the fence line traverse, where quartz sands up to 8m thick have beenidentified returning twice the background radioactivity in the area. Moredrilling is required in the area. Assay results from this drilling will be available in November. Harts Range Project The Harts Range project area lies on the eastern margin of the Entia Dome. TheEntia Gneiss forms the core of the Entia Dome, which is located on the westernpart of the Exploration Licence area. In late July, a mapping and rock chip survey was carried out on tenementsEL24736 and EL24734, two of the tenements within the Harts Range Uranium Projectwhich is located approximately 200km east-northeast of Alice Springs in theArunta Province of the Northern Territory. The project includes five othertenements, EL24827, EL24735, EL24765 and A24766. The main objective of the sampling program was to follow up on previous rockchips taken earlier this year from identified areas around the Mt Mary, Daicosand Haddock prospects in order to identify drilling targets in this difficultterrain. A number of sub-parallel pegmatites had previously been surveyed at theHaddock Creek and Daicos prospects, with a maximum count of 19,000 cps returned. Four samples were taken, with one 1.5kg sample returning a very high uraniumresult of 8.87% U. At Mt Mary, two rock chips taken from 'hot spots' in thisarea returned elevated uranium values ranging from 107 to 246ppm. Rock chip sampling and mapping was also completed on the Daicos, Haddock, MountMary (SNAF & Indiana) and Starlight prospects, with a total of 39 rock chipsamples collected. Daicos Prospect Reconnaissance rock chip samples taken on pegmatite veins mapped at the Daicosprospect area returned a best assay of 19.37% U from highly radioactive sampleswith visible uraninite and columbite. Other highly anomalous elementsassociated with these samples included assays up to 28.32% Nb and 25.52% Ta.Highly anomalous assays for Dy, Er, Gd, Hf, Ho, Nd, Tb, Y and Zr from thesesamples were also noted. The combined average of these 9 associated rare earthelements is 3.49%. The samples were taken along a number of contact zones associated with anexposed pegmatite vein system covering an area of 300m by 400m. Drilling isbeing planned to determine the thickness and strike extent of the individualzones. A petrological assessment of the pegmatites is also warranted. Haddock Prospect The Haddock prospect covers the base of a large hill over a fold structurecontaining highly radioactive epidosite altered country rock and pegmatite.Previous trenching in the 1990's also returned highly anomalous U from trenchesacross the base of the hill. Recent sampling in this area returned a besturanium assay of 1,658ppm from sample HK006. Additional trenching andreconnaissance drilling is required to determine the full extent ofmineralisation in the area. Of the 17 rock chip sample assays taken at the Haddock prospect to date, onlythree exceed 0.1% uranium. The prospect should be evaluated in terms of a largetonnage/low grade uranium resource. Haddock type anomalies have been recognisedat points along a stratigraphic arc extending north. Approximately 12 km ofprospective strike length provides potential host extensions or repetitions ofepidosite-pegmatoid layers. A detailed airborne radiometric survey shoulddelineate the broad corridor in which these extensions of epidosite-pegmatoidmay occur. Indiana Prospect The newly identified Indiana prospect is associated with multiple pegmatiteintrusions in sheared country rock in a valley at the base of Mount Mary.Highly anomalous scintillometer readings were returned from numerous samples inthe area. Further mapping, rock chip sampling, trenching and drilling will bebased on these initial rock chip assay results. The full extent of the Indiana prospect is still not known; a best assay of673ppm uranium was returned from initial sampling in the area. Other projects During the quarter exploration was held up at Hatches Creek, as the Central LandCouncil was unable to organise a final clearance meeting with traditionalowners. No work was completed this quarter at the Hatches Creek, Curtis Pound and BundeyRiver Projects. CORPORATE Capital Raising and Listing on ASX During July a placement of 6,800,000 shares at 11 pence per share was completedon the AIM Market of the London Stock Exchange ("AIM"). These shares have beenplaced with sophisticated investors based in the UK for trading on AIM. The funds raised, approximating AUS$1.7m after costs, will be used to supplementshort term working capital requirements and to provide additional finance forthe development of Molyhil. The AGM will be held in London on the 20th of November at 11am, at the WyndhamHotel Chelsea Harbour. TENEMENTS Two Hatches Creek tenements, EL22912 and EL23463 were granted on the 24th ofJuly 2007. JORC Compliance The information in this report that relates to exploration results, mineralresources or ore reserves is based on information compiled by John Young, who isa Member of The Australasian Institute of Mining and Metallurgy. John Young is adirector of Thor Mining PLC. John Young has sufficient experience which isrelevant to the style of mineralisation and type of deposit under considerationand to the activity which he is undertaking to qualify as a Competent Person asdefined in the 2004 Edition of the "Australasian Code for Reporting ofExploration Results, Mineral Resources and Ore Reserves". John Young consentsto the inclusion in the report of the matters based on his information in theform and context in which it appears. Enquiries: John Young + 61 (0) 419 954 020 Thor Mining PLC Chief Executive Officer John Simpson 020 7512 0191 ARM Corporate Finance Ltd Nominated Adviser Leesa Peters 020 7429 6600 Conduit PR Limited Public Relations orJos Simson 020 7429 6603 Nicholas Read + 61 (0) 8 9388 1474 Read Corporate Public Relations -Australia Updates on the Company's activities are regularly posted on Thor's websitewww.thormining.com, which includes a facility to register to receive theseupdates by email. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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